Commentary

B2.811 Calculation of post-cessation receipts chargeable to tax—example

Business tax
Business tax | Commentary

B2.811 Calculation of post-cessation receipts chargeable to tax—example

Business tax | Commentary

B2.811 Calculation of post-cessation receipts chargeable to tax—example

The calculation of post-cessation receipts chargeable to tax where the accounts are prepared under GAAP is illustrated by the following example.

Example

C's results for the year ended 31 December 2019 show:

  1.  

         Work invoiced £60,000, opening debtors £5,000, closing debtors £10,000.

  1.  

         Expenses incurred £19,000, opening creditors £2,000, closing creditors £3,000.

  1.  

         Work in progress on 1 January 2019 of £9,000, 31 December 2019 of £13,000.

C discontinues his profession on 31 December 2019. He collects £4,000 of the outstanding debts on 1 March 2020 and £3,500 on 1 June 2020, but on 1

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